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1983 DIGILAW 86 (CAL)

E. C. Bose & Co. Private Ltd. v. Owners and Parties interested in the vessel M. V. "Banglar Swapna"

1983-03-30

DIPAK KUMAR SEN

body1983
JUDGMENT E. C. Bose & Company Private Limited, the plaintiff, has instituted this suit in the Admiralty Jurisdiction of this Court by way of an action in rem against the vessel "Banglar Swapna" claiming, inter alia,- a) a decree for Rs. 10,90,756.62 being for salvage rendered by the plaintiff against the owners and parties interested in M. V. "Banglar Maitri" ; b) a declaration that the plaintiff has lien, both maritime and contractual, extending over the vessel M. V. "Banglar Swapna" or any other vessel owned and administered by the owners and parties interested in M. V. "Banglar Maitri"; c) arrest of the vessel M. V. "Banglar Swapna" lying berthed at No.1, K. P. D. at the Port of Calcutta; d) sale of the vessel M. V. "Banglar Swapna" with her tackle, apparel 2nd furniture. 2. The plaintiff's case in this suit is, inter alia, that on the invitation and at the instance Bangladesh Shipping Corporation, the defendant No.2, as the owner and party interested in the vessel M. V. "Banglar Maitri" and being engaged by the latter on stipulated terms and conditions, the plaintiff agreed to and rendered salvage services to the vessel M. V. "Banglar Maitri" and its cargo when the vessel caught fire while in the port of Calcutta. 3. By reason of such salvage services rendered the vessel M. V. "Banglar Maitri" and her cargo were saved from sustaining further damages and possible total loss. 4. The plaintiff contends that having salvaged the said cargo it has a maritime lien over and in respect of the same and that such maritime his extends over and in respect of the vessel M. V. "Banglar Maitri" and her accessories and the plaintiff is entitled to proceed for recovery of its dues and enforcement of its maritime lien by the arrest of all property of the defendant No.2 within the said jurisdiction. 5. M. V. "Banglar Swapna", a vessel owned and administered by the defendant No.2 and lying berthed at the Port of Calcutta was a chattel within the jurisdiction of the Court when this suit was instituted and thus was liable to be proceeded against by the plaintiff for enforcement of the plaintiff's maritime lien and recovery of the plaintiff's dues. 5. M. V. "Banglar Swapna", a vessel owned and administered by the defendant No.2 and lying berthed at the Port of Calcutta was a chattel within the jurisdiction of the Court when this suit was instituted and thus was liable to be proceeded against by the plaintiff for enforcement of the plaintiff's maritime lien and recovery of the plaintiff's dues. It is alleged that after the salvage, the said vessel "Banglar Maitri' has been kept outside the jurisdiction of this Court to prevent the plaintiff from proceeding against her. 6. After the institution of this suit on or about the 28th June, 1982, on the application of the plaintiff, the vessel "Banglar Swapna" lying in the port of Calcutta was arrested by the Marshal of this Court subject to further orders and on condition that upon furnishing security to the extent of Rs. 10,00,000/- the vessel should be released. 7. On the 1st July, 1982, upon the defendant No. 2 giving an undertaking through the Director of Oceanic Shipping Company Ltd. the local agent of the defendant No.2, to furnish a bank guarantee of Rs. 11,00,000/- valid for three months in favour of the Advocate, on record of the plaintiff within seven days and upon further undertaking by the local agent to leave a balance of Rs. 11,00,000/- in its account with Grindlays Bank Ltd. The said vessel was released. 8. On a notice dated the 29th November, 1982, the defendant No.2 has applied for the following orders :- a) The orders dated the 28th June and the 15th July, 1982 be set aside or recalled or withdrawn ; (b) The defendant No. 2 or the Director of the Oceanic Shipping Agency Private Limited be discharged from their undertaking as recorded in the said order dated the 1st July, 1982 ; c) The Bank guarantee given by the petitioner through Sonali Bank of 15, Park Street, Calcutta in favour of Mr. S. K. Dhar, Solicitor and Advocate-on-record for the plaintiff be released or cancelled. 9. The defendant No. 2 contends, inter alia, that the work entrusted to and carried out by the plaintiff was not salvage service either to the vessel M. V. "Banglar Maitri" or to her cargo. It is alleged that neither the cargo nor the vessel was in real danger when the discharge and removal of the cargo was taken up. 9. The defendant No. 2 contends, inter alia, that the work entrusted to and carried out by the plaintiff was not salvage service either to the vessel M. V. "Banglar Maitri" or to her cargo. It is alleged that neither the cargo nor the vessel was in real danger when the discharge and removal of the cargo was taken up. It is alleged that plaintiff had been appointed the stevedore and had been acting as such in respect of the said vessel M. V. "Banglar Maitri" prior to the fire. 10. The defendant No.2 contends that the claim of the plaintiff in this suit goes beyond its dues under the said agreement of October. 1979 which would cover only charges on account of stevedoring and transportation. The plaintiff has made further claims in this suit on account of alleged detention of a mobile crane and generator on board the vessel "Banglar Maitri" and also for alleged detention of lorries, used in transporting the cargo, which are disputed. 11. The defendant No. 2 contends further that the Admiralty Jurisdiction of this Court in respect of claims for salvage service rendered to a vessel can be invoked by action in rem only against the vessel to which the salvage service is rendered and not against other vessel and therefore this Court had no jurisdiction to arrest the vessel M. V. "Banglar Swapna" for salvage services allegedly rendered to M. V. "Banglar Maitri." 12. It is also contended that this suit, instituted without the consent of the Central Government, is not maintainable against the defendant No.2 which is a foreign State within the meaning of section 86 of the Code of Civil Procedure. 13. The defendant No.2, it is contended, is entitled to be released from the obligation to continue the guarantee. 14. Sakti Sadhan Bose, a Director of the plaintiff, has affirmed an affidavit on the 25th January, 1983 which has been filed in opposition to the petition. The contentions of the defendant No. 2 have been disputed in this affidavit. 15. 13. The defendant No.2, it is contended, is entitled to be released from the obligation to continue the guarantee. 14. Sakti Sadhan Bose, a Director of the plaintiff, has affirmed an affidavit on the 25th January, 1983 which has been filed in opposition to the petition. The contentions of the defendant No. 2 have been disputed in this affidavit. 15. Learned Counsel for the defendant No.2 submitted at the hearing that sufficient evidence was not available to contend in this application that the defendant No. 2 was an organ of a foreign State and as such entitled to the protection of section 86 of the Code of Civil Procedure and that the defendant No.2 should be given leave to agitate this point later in the proceeding. 16. Learned Counsel next submitted that the Admiralty jurisdiction of the High Courts in India was limited and extended only to the claims which fell within the Admiralty Jurisdiction of the High Courts in England in 1890. This limitation arose from the Colonial Courts of Admiralty Act, 1890, section 2(2) whereof provides as follows : "The jurisdiction of a Colonial Court of Admiralty shall subject to the provisions of this Act, be over the like places, persons, matters and things as the Admiralty Jurisdiction of the High Court in England, whether existing by virtue of any statute or otherwise and the Colonial Court of Admiralty may exercise such jurisdiction in like manner and to as full an extent as the High Court in England and shall have the same regard as that Court to international law and the Comity of Nations". 17. Under section 2 of the Colonial Courts of Admiralty (India) Act, 1891, the High Court of Judicature at Fort William in Bengal was declared to be a Colonial Court of Admiralty. 18. Learned Counsel submitted that the said statutes not only defined the jurisdiction of a Colonial Court of Admiralty but also prescribed that such jurisdiction would be exercised in the same manner as the Admiralty Court of England. 19. Under the Admiralty jurisdiction of the English Courts as exercised originally both the person and properties of the defendant, if within the jurisdiction, could be arrested. The goods subject to arrest could include other vessels of the defendant unconnected with the cause of action. 20. Exercise of jurisdiction in such manner however became obsolute before the beginning of the 19th Century. The goods subject to arrest could include other vessels of the defendant unconnected with the cause of action. 20. Exercise of jurisdiction in such manner however became obsolute before the beginning of the 19th Century. Much later, under the Administration of Justice Act, 1956 a claimant in England has been given the right to invoke the Admiralty Jurisdiction of the English Courts for an action in rem against a "sistership". This English Statute passed subsequent to 1890 could not touch or affect the Admiralty Jurisdiction of the Indian Courts in any manner. 21. Learned Counsel for the plaintiff contended on the other hand that the jurisdiction of this Court as a Court of Admiralty was prescribed by Clause 26 of the Charter of 1774 as also by Colonial Courts of Admiralty Act, 1890. 22. The entire cause of action of the plaintiff in this suit, it was submitted, was based on an observation of Fry, LJ in (1) Heinrich Bjorn, reported in 5 Asp. MC 391. This decision has been considered hereafter. 23. Though later, the Courts in England decided not to follow the principles laid down in Heinrich Bjorn, the Parliament in England within two decades felt it necessary to reintroduce the same principles by a statutory enactment i.e., the Administration of Justice Act, 1956. 24. Learned Counsel submitted that the jurisdiction conferred on the Indian Courts, the same as that of the English Courts in 1890, was sufficiently elastic and the Courts in India in any event should extend such jurisdiction in view of modern maritime requirements. 25. The following decisions were cited at the Bar: (a) In the case of (2) Mohamed Saieh Behbehari & Co. v. Broja Trader, reported in 1981 (2) CLJ 129 . Here the plaintiff sought to arrest a vessel for its claim on account of loss and damage suffered by breach of a charter-party agreement. The vessel had changed hands in the meantime and the claim of the plaintiff was contested by the new owner. It was hold that the claim of the plaintiff could not be pursued in the Admiralty Jurisdiction of this Court and that prima facie, the suit was not maintainable in the said jurisdiction. It was observed as follows :- "By the operation of the Colonial Courts of Admiralty Act, 1890 and the Colonial Courts of Admiralty (India) Act, 1891 the Admiralty. It was observed as follows :- "By the operation of the Colonial Courts of Admiralty Act, 1890 and the Colonial Courts of Admiralty (India) Act, 1891 the Admiralty. Jurisdiction of this Court was for the last time finally determined. Such jurisdiction, in my view, his stood frozen as at that stage and continued to remain in stasis right up to the present. It is for this reason that from time to time our Court were constrained to observe that legislation had become necessary to extend or modify such jurisdiction in the light of subsequent experience of other countries including England". (b) In the case of Heinrich Bjorn (supra), this decision was cited for the following observation of Fry, L.J. "But how and in what manner was the new jurisdiction thus given to the Admiralty Court by the Statute of 1840 to be exercised? The answer is that it must be exercised in the manner familiar to the Court of Admiralty and to all Courts regulated by the Civil law, either by an arrest of the person of the defendant if within the realm, or by the arrest of all personal property of the defendant within the realm whether the ship in question or any other chattel, or by proceedings against the real property of the defendant within the realm". "The arrest of a vessel under the Statute is only one of several possible alternative proceedings ad fundandam jurisdictions. It. creates no right in the ship or against the ship at any time before the arrest; it has no relation back to any earlier period, it is available only against the property of the person who owes the debit for necessaries, and the arrest need not be of the ship in question, but may be of any property of the defendant within the realm". (c) In the case of (3) The Dictator, reported in 1891-1894 AER (repeint) 360. This was an action in rem for salvage where the original claim on the writ was allowed to be amended after the amount of salvage was determined. The question arose whether in an action in rem there could be execution for a greater amount than that originally claimed. Jenue J. in his judgment traced the history of the Admiralty jurisdiction in England and observed as follows:- "When actions beginning by arrest of the person became obsolete in the last century, as Dr. The question arose whether in an action in rem there could be execution for a greater amount than that originally claimed. Jenue J. in his judgment traced the history of the Admiralty jurisdiction in England and observed as follows:- "When actions beginning by arrest of the person became obsolete in the last century, as Dr. Loushington, in The Clara says they did, the last being in 1780, and the arrest of the property other than the res to compel appearance, which must always have been unusual, became obsolete also, the result was that the only action beginning by arrest at all was one beginning by arrest of the res though in theory arrest of the person would still seem permissible (per Fry, L.J. in the Henrich Bjorn). On the other hand, arrest of property over which a lien could be enforced became more common as the idea of a pre-existing maritime lien developed, and arrest of property, in order to arrest for the creditor that legal nexus over the proprietory interest of his debtor as from the date of the attachment of which Lord Watson speaks in the Heinrich Bjorn grew up. The result, was that arrest became the distinctive feature of the action in rem, such arrest having primarily for its object the satisfaction of the creditor out of the property seized." (d) In the case of (4) The Beldes, reported in 1935 AER (reprint) 760. Here, an action in rem in Admiralty Jurisdiction was initiated against the vessel Beldes in a County Court for recovery of the amount of an a ward un respect of freight. Under a charter-party which related not to ‘Beldes’ but the vessel 'Belfry' also belonging to the defendant. The defendant did not appear and judgment was entered against them by default. The mortgagees of the vessel 'Beldes' intervened. The question arose whether the plaintiff's action in rem against Beldes was maintainable. Following the dictum of Fry, L.J. in the Heinrich Bjorn (supra) the County Court decided in favour of the plaintiff. On an appeal it was held, inter alia, that the dictum of Fry, L.J. in Heinrich Bjorn was an obiter, not binding and, in any event, erroneous. It was further held that the procedure an rem did not permit the arrest of a ship or other property of the defendant unconnected with the cause of action. On an appeal it was held, inter alia, that the dictum of Fry, L.J. in Heinrich Bjorn was an obiter, not binding and, in any event, erroneous. It was further held that the procedure an rem did not permit the arrest of a ship or other property of the defendant unconnected with the cause of action. The following observations in the judgment of Sir Boyd Merriman were relied on : "It is admitted that the industry of counsel has not resulted In finding a single instance in which, either between the passing of the Act of 1840 and the decision in The Heinrich Bjorn, 1885 or from then until the present time, property, other than that directly connected with the cause of action, has been arrested as the res in an Admiralty action". "In the passage quoted above from the Introduction to the select pleas in Adminalty" Mr. Marsden speaks of the modern doctrine of arrest being founded on a m maritime lien. This doctrine is clearly expressed in the opinion of tile Privy Council, given by Sir John Jervis in the Boid Buccleugh where it is laid down that a maritime lien is the foundation of the proceeding in rem, a process to make perfect a Tight inchoate from the moment the lien attaches; and while it must be admitted that where such a lien exists a proceeding in rem may be had, it will be found to be equally true that in all cases where a proceeding in rem is the proper course, there" a maritime lien exists, which gives a privilege or claim upon the thing, to be carried into effect by legal process. "This view as to the coincidences of the maritime lien and the action in rem was expressly disapproved in the House of Lords in the Heinrich Bjorn. "This view as to the coincidences of the maritime lien and the action in rem was expressly disapproved in the House of Lords in the Heinrich Bjorn. But the very fact that in 1851 it should be possible for the Privy Council to lay down that the action in rem was exactly co-extensive with the maritime lien, which was said to its foundation, shows that no one then contemplated that an action in rem could be founded on the arrest of the property of the defendant owner unconnected with the circumstances giving rise to the lien." The following observations in the judgment of Scott, L.J. were also relied on : "In many continental systems of law and procedure (e.g., in Germany, Sweeden, Belgium, and to a certain extent in France) there is a right of arrest for founding jurisdiction and obtaining bail in respect of any ship or other property of a defendant, although wholly unconnected with the cause of action sued on. But in England I have never heard of such an arrest and I do not believe any attempt has ever been made here to exercise such a right in practice within the memory of any living practitioner in the Admiralty Court until the plaintiffs in the present action made it. In my view, there is no such right in English law to-day." Counsel for the plaintiffs naturally relied strongly upon the expression of opinion in the Court of Appeal in the Heinrich Bjorn, which appears in the judgment of the Court and delivered by Fry, L.J. The learned Lord justice there said in regard to the procedure in rem : "The arrest need not be of the ship in question, but may be of any property of the defendant within the realm". "That observations was however, purely obiter. Apart from an unfounded contention of a bottomry bond, which the court rejected, the only question of law relevant to the decision of the case whether a maritime lien attaches in English law to a valid claim for necessaries. That was necessarily the sole issue in that case since the ship for which the necessaries had been supplied had passed by sale from the ownership of the ship owners for whom the necessaries had been supplied to that of new owners who had nothing to do with the voyage when the necessaries were supplied. That was necessarily the sole issue in that case since the ship for which the necessaries had been supplied had passed by sale from the ownership of the ship owners for whom the necessaries had been supplied to that of new owners who had nothing to do with the voyage when the necessaries were supplied. If there was a maritime lien the new owners took subject to the lien; if there was no maritime lien their ship was free and the plaintiff had no right to arrest it in their hands. The opinion of the Court in the Heinrich Bjorn is entitled to great respect; but it is not binding on us, and in my view the dictum is erroneous". "My reasons are as follows: There is little doubt that historically the jurisdiction of Admiralty Court was originally exercised by employing either of two methods of procedure for bring the defendant before the Court (i) The arrest of his person; (ii) the seizure of his goods". "But it seems to be equally clear that both methods had fallen into disuse before the beginning of the nineteenth Century, probably as a result of the incessant war of jurisdiction waged by the Common Law courts on the Admiralty Court in the sixteenth and seventeenth centuries. “The complete absence of any reported case in the last 100 years, in which the present attempt to arrest a ship or properly unconnected with the cause of action has ever been made before, is, indeed, of itself almost conclusive that the procedure in rem was not regarded in the Admiralty Court as extending to such other ships or property, and from this fact, too, I drew the inference that it had ceased to be permissible." (e) In the case of” (5) The Banco, reported in 1971(1) AER 524. The decision was cited for the following observations of Lord Denning, M. R. "This case requires us to enquire into the jurisdiction of the Court of Admiralty. Long years ago, in the seventeenth eighteenth centuries, the ordinary mode of commencing a suit in Admiralty was by arrest. Not only could be offending ship be arrested, but the other ships of the defendant could be arrested also, any other goods that belonged to him, so long as they were within the jurisdiction. Long years ago, in the seventeenth eighteenth centuries, the ordinary mode of commencing a suit in Admiralty was by arrest. Not only could be offending ship be arrested, but the other ships of the defendant could be arrested also, any other goods that belonged to him, so long as they were within the jurisdiction. The object was to make the defendant put up bail or provide a fund for securing compliance with the judgment, if and when it was obtained against him. In this respect the Court of Admiralty in those days exercised a jurisdiction which obtained in foreign countries too, and still prevails in many of them today. The courts of Common Law were, however, jealous of the jurisdiction of the old Court of Admiralty and issued prohibitions against it. They succeeded in cutting down its jurisdiction a great deal. So much so that its jurisdiction in rem to arrest the offending ship itself. The right to arrest was conterminous with the maritime lien. Where there was no maritime lien, there was no right to arrest the ship. A maritime lien, there was no right to arrest the ship. A maritime lien, of course, existed only in respect of the offending ship. It lay for such claims as salvage, wages and collision damages. The claimant had a right to arrest the offending ship for his claim, whenever he could get hold of her. Even if she had been sold to an innocent purchaser for value, still he could arrest her for any claim in respect of which, he had a maritime lien: see The Boid Buccleugh, Harmer v. Bell. Later on the right to arrest was extended beyond the extent of a maritime lien so as to cover necessaries: see The Heinrich Bjorn. But it only applied to arresting the ship itself for which the necessaries were supplied. It did not apply to any other ship. Finally, in 1935, this Court held that the procedure in rem to arrest a ship only applies to the ship to which the cause of action relates. It does not apply to a ship or other property of the defendant unconnected with the cause of action : see The Beldes" . 26. The plaintiff does not dispute that the Admiralty Jurisdiction to be exercised by this Court is the same as that exercised by the Courts of Admiralty in England in 1890. It does not apply to a ship or other property of the defendant unconnected with the cause of action : see The Beldes" . 26. The plaintiff does not dispute that the Admiralty Jurisdiction to be exercised by this Court is the same as that exercised by the Courts of Admiralty in England in 1890. Therefore, the issue resolves to this, whether in 1890 the Courts in England exercising Admiralty jurisdiction would allow an action in rem in respect of property of the defendant unconnected with the cause of the plaintiff. 27. In The Dictator's case (supra) where the judgment was delivered on the 10th May, 1892, Jeune, J. laid down that arrest of property other than the res connected with the cause of action (which was always unusual) became obsolete in the last century i.e. the eighteenth century. It is also noted in The Beldes in 1935 that no case was reported in the last 100 years where a ship or property unconnected with the cause of action had been arrested in an Admiralty action. This position is confirmed in The Banco (supra). 28. Under the Colonial Courts of Admiralty (India) Act, 1891 the Jurisdiction in Admiralty was finally conferred on the Courts of India and the specific jurisdiction conferred was that of the English Courts in 1891. It was further provided by the said statute that the exercise of the said jurisdiction would be in the same manner as exercised by the English Courts. 29. The Admiralty Jurisdiction of the English Courts as prevailing in 1891 has been discussed in the decisions cited and it appears to be the consensus of opinion that in 1891 an English Court would not in the exercise of its Admiralty Jurisdiction arrest any 'rest' of the defendant unconnected with the plaintiff's cause of action. 30. The Courts in India and in particular this Court, in my opinion, would exercise the same jurisdiction and would refrain from arresting a ship of the defendant where the cause of action arises in respect of another. 31. Law in India, so far as Admiralty Jurisdiction is concerned might be awaiting extension in the light of the experience of and the law prevailing in other countries. But that objective cannot be usefully or effectively achieved by treading the paths of obscure and obsolete English practice. 31. Law in India, so far as Admiralty Jurisdiction is concerned might be awaiting extension in the light of the experience of and the law prevailing in other countries. But that objective cannot be usefully or effectively achieved by treading the paths of obscure and obsolete English practice. Modernisation of this important branch of law has to be achieved through proper legislation. 32. For the reasons above the ingenious attempt of the plaintiff to extend the Admiralty Jurisdiction of this Court must fail. 33. The application succeeds. There will be an order in terms of prayer(b). Costs in the cause. On the oral application made by the learned Advocate for the plaintiff, the operation of this order will be stayed for three weeks.